PI officials explore options on lots

November 2, 2012

Presque Isle County officials are considering their options on what to do with 91 tax-foreclosed lots that didn't sell at two auctions.

For now, local governments at the township and city levels have the option to keep the properties for their own purposes, Patricia Bauer, county treasurer, said. It's possible all of them could be turned back to the county, which would have to sell each one for whatever it can get. While the county has money set aside to cover lost revenue from tax-foreclosed land, it's the first time the county has leftover lots since it started auctioning them about 10 years ago.

"If we get all of these back from the townships and attempt to sell them, we will probably put a price on them that we can recoup all the monies we paid out to the townships when they first became delinquent taxes," she said.

Presque Isle Township officials must decide what to do with 84 lots, most of which are north of Grand Lake, Bauer said. Four are in Krakow Township, and one is in Rogers Township. Two houses in Onaway, both of which had requirements that the purchaser demolish them, didn't sell either.

In August, the county auctioned off lots with back taxes from 2009 through Michigan public land auctions. For each lot, bidders had to start at back taxes owed, plus any other fees levied on the property since foreclosure. Numerous lots sold, including a house in Onaway.

After a second auction in October, one with no minimum bids, the county has recovered $58,440, less than half of $114,976 in back taxes, Bauer said. The county has about $600,000 set aside from previous foreclosure sales gains, and the option to charge townships for the amount paid to them for back taxes.

"I don't know if we'd want to do that," she said. "It's something we'll have to discuss because we have in the past not had to do that."

Onaway and county officials are planning to demolish both empty and derelict houses in the city. The plan is to apply for state money set aside to fix blighted properties and bulldoze the houses, possibly after Onaway Area Fire Department uses them as controlled-burn training exercises, City Manager Joe Hefele said.

"We need to get a better look at both properties to put together a legitimate project for both," he said. "We're in the process of determining who the lead agency would be, who would actually handle the project, so there's still some work to do."

Michigan was one of 49 states to receive money from a class-action lawsuit settlement against five of the United States' largest mortgagers, Hefele said. Of the $97.2 million received, $15 million was set aside for blight elimination statewide. He and Bauer, with assistance from Northeast Michigan Affordable Housing, are working to apply for money to demolish these houses with the intent of selling the land later.

This blight removal application is due by mid-December, and Hefele and Bauer should know by Feb. 15 if theirs is accepted, Hefele said.

Bauer said she's uncertain if the county will be in this situation again.

"If the economy picks up again and property values get a little better, we could certainly see more activity" at foreclosure auctions, she said.